Rugby Australia doing the right thing

At what point do you recognise that a partnership has become an abusive relationship? It’s a question Rugby Australia must have asked itself recently about its broadcast ‘partner’ for the last 25 years, Foxtel.

According to a coalition of self-interested voices led by Newscorp (65% owners of Foxtel), RA have recklessly passed on Foxtel’s offer for the next 5 years of Australian rugby broadcast rights that would price them flat for a decade. Reckless, apparently, because rugby in Australia is a hot mess being led into TV rights oblivion by a team who need to know their place, take what they’re given and be grateful for it.

The only way RA can test the value is to take those rights to market. Not only is this Governance 101, but at a time when ASIC is taking Harold Mitchell to legal task over allegedly manipulating Tennis Australia rights, there is no real choice.

So, could other rights partners really love Australian rugby more than Foxtel? Let’s look at two believed to be making eyes.

Rugby’s value to Foxtel has always been clear – when you’re flogging subscriptions, cornering the most price insensitive segments is a crucial foundation to the business. For Optus selling phone plans (subscriptions), grabbing those segments makes exactly the same sense. They either switch to your service to get the sport for ‘free’, or you take money out of your competitor customer’s pocket when they buy the access.

Optus wants to expand on the success of their Premier League football rights in doing exactly this. What they need are affordable, yet price-insensitive, fanbases that are incremental to Premier League supporters (I.e. people who are not A-League fans). Optus, say hello to Rugby and V8 Supercars.

Rugby in Australia has traditionally struggled as a mass broadcast proposition, not helped by Super Rugby’s over-expansion which has produced a bewilderingly erratic schedule of often pointless matches. Free-to-air broadcasters want dependable appointment viewing across big chunks of air-time.

How players feel about Club footy being paid to be on FTA

From 2021, however, RA is manoeuvring to have weekly Saturday scheduling of a club game at 3pm, followed by an Australian Super team in New Zealand at 5pm, rounded off by a home Australian Super Rugby fixture at 7.30pm. Sprinkle around that Internationals, Women’s rugby, Schoolboy and Sevens and this is just the sort of programming that Channel Ten – currently devoid of a regular sporting code – needs.

Ten re-imagined cricket as a product with the Big Bash. A similar opportunity lies with rugby, but it requires a new approach in content creation and marketing. Rugby is chess versus League’s checkers and AFL is a game that has no discernible rules. Rugby needs to lean into that, not apologise for it; adopt a brazen new challenger approach that finally moves on from a golden period the current crop of fans and players weren’t even alive for. Search YouTube for Squidge Rugby and The 1014 Rugby to get a hint of what’s possible.

When it comes to evaluating any eventual rights bids, it’s not just the headline dollar figure that counts. Platform reach, access to talent, contra, and the level of commitment to promoting the code are all elements of a bidder’s value proposition.

Foxtel, with a declining viewer base behind a paywall has always been weak on the first element. Recent disasters like English cricket going all-in behind a paywall are showing RA just what they might have been missing locked away in the attic this past quarter of a century. If you support the premise of ‘you can’t be what you can’t see’ then is it any wonder rugby struggles for participation numbers? By making the sport more visible, the flow on effect will be more participants (active and spectators), resulting in a more valuable code to corporate suitors.

The recent months of RA attempting to explain to current and would-be sponsors their ‘partner’ Newscorp’s full on assault must have certainly put the last value proposition element of ‘promoting the code’ into clear focus. You could be mistaken thinking that Newscorp were in fact trying to drive down the code’s value…

Which brings us to Foxtel’s core negotiation tactic; bully the seller from going to market. With RA calling their bluff however, Foxtel and Newscorp have been left making one hell of a song and dance about a set of rights they would like us to believe are no big deal to them.

Meanwhile, Newscorp’s investor update last Friday revealed that 13 percent of Kayo’s subscribers vaporised at the end of the Rugby World Cup in November. Imagine the carnage should they lose Rugby altogether. That’s even before you get to the legion of wealthy, rusted-on, rugby fan boomers who still form the backbone of old school set-top Foxtel.

RA CEO Raelene Castle and her team have created a compelling package of content to take to market – securing Club Rugby was no mean political feat. With every scolding Newscorp article that lands they should feel assured they’re headed down the right path.

“We now cross to the Rugby Report Card commentators on the sideline. Cover your kids’ ears”

Reds Revival

I love the idea. Maybe they just do sideline for the games after 8.30pm.
I bet they would get a following though…

Yowie

If it’s from the sideline there would probably be an inevitable toning-down of the fruitier comments about particular players who “need to put in more effort” for GAGR workplace health & safety reasons. When the player is 2m tall, 130kg, full of adrenaline and can hear you….

Reds Revival

They can broadcast from a bullet proof bunker. Or maybe the Pope-mobile when it’s not being used.

Hey mate
I’m still unsure about the whole thing, particularly as to the effect of the Shute Shield losing an opportunity for funding (which I believe is being offered by News) but you’ve made a good argument. Cheers

RA is already subsidising SRU for £200K or of the circa £300K they have to pay 7 to broadcast the games so paying this out doesn’t make RA materially any worse off in this respect.

MungBean

ok. thanks for the clarification

paul

Great article, I back the RA’s approach on this, maybe the game has finally decided that it needs to walk on its own two feet. A couple of points backing up what you say.
1. We have got to stop apologizing for the game, yes the rules are complicated, but you don’t see this in NZ coverage, yet in Aus everyday its a constant barrage of watching paint dry.
2. Bang on, a fresh approach, for 20 years we’ve had the same commentators, we have to move on from Phil Kearns.
3. The game has to move forward as one, it can’t all be about the Wallabies, the game has got to start justifying decisions, look at this January start, a f___g disaster, but was there any consultation or discussion about how this affects franchises etc, its like the fan was the last consideration.
4. This is just the beginning, who knows with SA moving north, the game has to evolve, you can’t do that unless you have the flexibility to adjust or create options, another 4 years of foxtel would have ensured you are incapable of doing that.

I’m sick of hearing about SA wanting out. I’m happy with whatever they do but ffs just do it and stoo fucking everyone else around.

Jason

This is just the beginning, who knows with SA moving north, the game has
to evolve, you can’t do that unless you have the flexibility to adjust
or create options, another 4 years of foxtel would have ensured you are
incapable of doing that.

Oh, this is completely transparent from South Africa, I started suspecting they were leaving when they sent there teams to Premiership Rugby, even then you look back and see a wealth of examples of how South Africa were probably threatening to leave to get there way (then likely about adding 2 teams). Since then they have been threatening to leave if they don’t what they want.

Hannes En Brianda Barnard

The premium broadcasting product is “live” television, it is therefore predictable that commercial interest will drive an alignment of competitions and parties around time zones. SANZAR developed to counter the dominance of the Home Nations at the end of the amateur era, however Superugby has become problematic as it is played over 16 time zones, very expensive and to run and lost a lot of support from partners, players, spectators, viewers, sponsors and broadcasters The tension in the SANZAAR partnership will continue to escalate as stakeholders re-aligned their interests along time zones. Instead of resisting this re-alignment it would be wise to shape it so that Australia are not sidetracked. The end game is probably an expanded international test window and smaller but more cost effective Tier 2 competitions played along time zone blocks (Jpn/Aus/NZ/PI, Europe/Africa and the Americas). With 6 Nations played at the start of the year and the Rugby Championships in the middle of the year, there is no reason why the Boks cannot play in both especially as the best Boks will not be featuring in Superugby in a non-World Cup years as South Africa cannot afford to pay them what they can get elsewhere.

Jason

I don’t think South Africa can do both and not compromise either 6 Nations, Super Rugby or the Rugby Championship and I don’t think Australia and New Zealand would or should allow it to be Super Rugby or the Rugby Championship; and I don’t think it’s in South Africa’s interest to have it be 6 Nations / the Rugby Championship, otherwise there World Rugby rank would be abysmal and they’d compromise any World Cup campaigns.

So it’s somewhat inevitable that South Africa if they are joining the Six Nations (every indication has been they are planning on) then they WILL be leaving Super Rugby at a minimum, unless there is significant restructuring of the World Rugby Calendar. The European Teams won’t continue to bring in South African players if they are having to leave both the 6 Nations and the Rugby Championship. Ultimately this is exactly what South Africa wanted, they have probably had designs on this since around 2010. I hope they get everything that’s coming to them, and then some! They have used and abused SAANZAR & Super Rugby, let them sod off to Europe so we can fix what has been broken.

Reds Revival

It kind of shows Twiggy’s foresight to develop a competition in our own time zone (comparatively).

He is obviously playing the long game in trying to help Asia 1) get a taste for the game, and 2) start to develop their own talent.

The question is, how long will it take for these other nations to become competitive?

Hannes En Brianda Barnard

With the Valke and Bay of Plenty partnering with Malaysia and China the teams it will be much more competitive than most expect. With teams playing regularly this will also make the competition more even.
To improve the local competitions, based on what I have seen in WA, is a decade plus project. However you need to start somewhere.

RF

I’d rather go all in on FTA than a higher financial offer from Optus.

We stand more to gain growing the game by staying mainstream.

Who?

I think you’re right, but either way, I’d expect it’s an increase in potential eyeballs. Because I’d guess Optus’ subscriber base (across NBN and mobile) couldn’t be lower than Foxtel’s.

Nutta

Good article and a particularly real point about governance 101 and defensibly acting in the best interests of the game. Enough of the pineapples in paper bags and closed shop approaches. Enough of the BS about a fair & open review when the decision was already made. Enough of the shut-outs to opposing ideas because you don’t like it. And enough of the sweetheart deals with those who don’t openly and transparently serve the best interests of the game. After decades of shady-deals with mates that simply stink, then the more good-governance approaches that are taken the better.

Jason

I’ve actually thought for a long time, Rugby is more valuable to Fox than Rugby League, AFL etc. because Rugby Union brings subscribers, both Leagues (Australian Football and Rugby) might get more viewership but Rugby Union is the reason a lot of people actually subscribe, and Fox is the only place you can get it (could get it hopefully).

George McDonald

It’s the ONLY reason I have Foxtel and the ONLY reason I’ve had it since the 1999 RWC.
I’ve been looking to drop fox for years but prior to Kayo there wasn’t a viable (legal) option.
Being a rugby tragic living in Adelaide makes Foxtel the only real option at the moment.

RugbyM

Me to. Signed up for Foxtel a few games into RWC 2011 after Channel 9 decided to show a league match live and then the Wallabies match delayed… and then announced the final score during the league match. Ditched Foxtel about 6 weeks before RWC 2019 as paying through the roof to watch basically 1 channel. Got Kayo for the rugby (yes yes i know, still Foxtel based), but a heck of a lot cheaper for what I’m actually watching.

Christopher

Regular content couldn’t be more important. There has to be a game/s on every week at the same time.

Having to check each week when teams are playing is absolutely ludicrous. No other sport does this.

John_R

Great article, thanks Matt. And congrats on the gig at Pedestrian. I expect you’re extremely well versed in emoji’s and internet idiom’s now!

Matt, Some good independent thinking there mate. The Newscorps concerted attack on RA by all their journalists is so obvious, most people can see right through it. As a Force and GRR fan, I dont really care who wins it the rights to broadcast Super and Shute. I cancelled Fox 6 months ago when my contract expired.
But I wait with interest to see how GRR partners with the media, so their games are broadcast as widely and for free (or near free). With Twiggy’s financial backing they can hopefully concentrate on the long term and growing their fan base & competition across Asia and the South Pacific, instead of grabbing the restrictive short term Fox money like the RA have done for the past 25 years.

Keith Butler

Gave up Foxtel months ago and now with Kayo which might also disappear in 2021. Heard about Rugby Pass from KARL but it seems to be confined to Asian countries. Would be quite happy for rugby to be available FTA but adverts could be a very big issue.

Huw Tindall

With a few cheats like registering with an overseas address and using a VPN you can make rugbypass work in Australia. It’s a bit of a faff though and a blocker to all but the keenest and most tech savvy fans.

Keith Butler

Well that leave me out then. Tech savvy I ain’t.

RugbyReg

JJ do you think the lack of any broadcast deal for this year’s GRR could be in anyway linked to there being a possible link back with RA?

JJ

Reg, I cant believe there is any GRR link back to the RA and their broadcast deals It all very quite here in WA with not a lot of rumours going on, but I am confident there is a lot of hidden GRR activity behind the scenes.They dont seem to have the need to feed leaks to the press like the RA have done for many years.
Talking about the RA, all is very quite as to the new chairman and board. Has the revolution been squashed?

RugbyReg

I think you are right JJ. I’d expect they’d be super cautious about any attempt to bring them back too. Understandably.

As for Clyne, he’s gone at the next AGM I believe. Make no mistake, if Castle pulls this broadcast deal off then Cam will bask in the glory of all HE achieved for rugby in Australia

LBJ

Sounds terrific – and I hope you’re broadly correct with regard to the content offering.
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Just a couple of thoughts:
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News Corp are IMPORTANT! Whatever anyone thinks about them, they are the largest and broadest (reach) media organisation on the planet – particularly in Australia. We need their support in some capacity (not necessarily as broadcast partners). They play an enormous role in setting the topics and tone for conversations in this country – and they tend to hunt as a pack.
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Why is the ARU’s strategy such a secret – it feels like its being made up on the run…? If the Shute Shield was only locked down late last week, can we really believe they are a core part of the strategy? There was never any real risk of Sydney not aligning with ARU (although i’m sure they were tempted), but if it was core, why was it not locked down much earlier?
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If Ten are the only potential FTA broadcast partner, then it is not a competitive tender – which means very low$$$
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The risks of getting this wrong are enormous – what is ARU’s appetite and capability to whether a self-imposed five year drought?

Reds Revival

While Ten might be the only FTA bidder, they realise that they will be bidding against Optus, and possibly Fox. The team at Fox have blind sided them before with the cricket rights, so they won’t be going in lightly.

LBJ

I hope you’re right.

Twoilms

Clearly never been involved in a negotiation if you’d broadcast your strategy ahead of time..

LBJ

Thanks – I’m pretty comfortable with my negotiating credentials.
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They have actually signalled their negotiating strategy very clearly – “Give us what we want or we will go to market”.
– Fox said ‘no’, so we are going to market.
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What I’m asking about is the game’s strategy and why it will succeed where it has been failing in the past (current).
– Refer my response above.

Who?

Their negotiating strategy’s not clear. They haven’t said, “Give us what we want or we’ll go to the market.”
.
It’s more like, “Look at poor old Harold Mitchell, who started the Rebels for us. He didn’t take the tennis rights to market, and now he’s in serious trouble with the government. We’d better let everyone know our TV rights are up for renewal. And Fox hasn’t got much cash, they’ve paid a bucketload for cricket (which is covered well enough on FTA that people don’t sign to Fox for cricket), and League (ditto), and AFL (ditto!), so they haven’t got much left for us. We better make our product as attractive as we can.”
.
And we’ll see how much money we lose compared to the current deal. Because, with declining incomes for broadcasters of all sorts, all sports are going to take a haircut, we’re just amongst the first.

LBJ

I think we’re actually agreeing – you’re outlining the rationale for the negotiating strategy, which sounds like a reasonable explanation to me. I’m not criticising the negotiating strategy, rather highlighting the risks associated with it (there may not be a competitive bidding process).

I will however take issue with the idea that a lower $ number is acceptable. Its not. I’m not suggesting its easy, or that I could walk in the door and make it happen – but there is no excuse for paying a management team millions of $ to lose money.

And there remains no explanation (clear or otherwise) on the game strategy. I find that unacceptable.

Who?

I hope that the bidding process is competitive, and, given it’s gone to market, rather than being yet another behind the scenes deal with Fox, I think we’re a better chance of seeing a competitive bid.
.
But I don’t think it’s reasonable to expect the same figure. We provide less content (which RA’s trying to address, by bundling up the metro club comps – though I don’t think that’ll earn much, though it doesn’t address the loss of the Force or the seeming expected surrender of NRC, which gave quality content all the way through October), the future of Super Rugby and TRC’s under a cloud due to whispers around SARU (and Aussie fans long saying we should abandon them), and, more crucially, it’s a buyer’s market.
The major issue is that the broadcasters have lost their pre-eminence, they’re no longer enjoying rivers of gold, it’s all going to Facebook and Google. Even if we’d miraculously won last November, reality is that Fox simply doesn’t have the coin it had, and they’ve spent what coin they had purchasing properties that don’t drive subscriptions (i.e. the average cricket/league/AFL fan can get most of what they want on FTA).
I’m expecting, through this cycle of TV rights deals, all the codes to see a reduction in broadcast income. Given Rugby’s performance under Clyne and Cheika, it’s only right that we should expect to take a larger than average bath. But I don’t think we’ll be the only ones taking a bath.
And I think Castle’s doing a reasonable job of trying to salvage what should be a brutal experience, with RA having overpromised and underdelivered.

LBJ

I’ll never agree with you on this idea that the broadcast target should be lower than current deal. There is literally no reason to have a team of highly paid executives (and consultants) in place, if their deal target is not an increase in funding AND an improved strategy.
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The targets are very clear – and they are BOTH mandatory:
1. an increase in funding
2. a clear strategy for the ongoing well-being/ prosperity of the game.
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ARU and Castle and her negotiating team (I forget their names) have been given everything they have asked for – as they should be. They are getting paid very well – as they should be. And they will be held to account for their outcomes – as they should be.
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If they succeed – on BOTH counts (don’t forget that Pulver succeeded on one count only and look where that got us) – they will be lauded throughout the land – as they should be.
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If, however, they are incapable of taking everything rugby has to offer and turning it into a more valuable deal, they should not be in their positions. Thanks for coming, i appreciate you tried hard, you’re very nice people etc. but you failed – there’s the door.
.
That’s how it goes for everyone.

Who?

If you require that the broadcast deal be higher than the previous one, you’re not going to be happy with anyone. The issues aren’t solely of Rugby’s making, they’re all to do with the changing media environment. I’m not opposed to wanting higher numbers, but what you’re effectively demanding is that someone selling draught horses increase their turnover at a time when trucks are becoming ubiquitous.Fox has taken out $500 Million in loans from News last year. That doesn’t sound like a sustainable situation… And you’re going to blame a sports administrator – any sports administrator – for not managing to squeeze more cash out of a dying company..?
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Your second point – a strategy for the ongoing wellbeing of the game – I think that’s fair. And it may actually be that going to a lower value deal may force that strategic thinking.

LBJ

What would be disappointing is if anyone took money to do a job they knew they couldn’t do..that would be unethical. Which I don’t think is the case.
.

Patrick

I think they’ve been pretty clear that their strategy is to get the most money and the most exposure?

LBJ

If that’s their strategy – we’re screwed…
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I mean whats their strategy for growing the game (playing and spectating – at ground and on screens etc.);
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What does Super Rugby look like and why will it succeed this time?
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NRC is obviously dead – what is replacing it and why will it succeed? Why will anyone care this time?
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7’s – how is it going to break down barriers between codes?
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Etc Etc.

Reds Revival

Great read Matt, and well researched. Having worked previously for WIN TV (the regional broadcaster for 9, and then Channel Ten). I have seen first hand how ratings for League have dropped year on year for several years in a row. I also saw how Ten built Big Bash up from a very small viewer base to now be one of the top FTA sports. Considering they lost the cricket to 7 and Fox, they are looking to help build a sport up, and Rugby is perfect for them (as well as for the game itself. I think RA are going to be very pleasantly surprised at the energy that Ten will put into developing the sport.
I also have to say, for all of her critics, The Pirate has done an admirable and effective job in very difficult circumstances. I think that she is a great example of getting a professional sports administrator in to run the game, rather than a rugby old boy.

idiot savant

Great article Matt. Right on the money.

LED

Imagine an Australian rugby media world without the confused sound of Phil Kearns….We can dream.

RedAnt

Nice one, Matt. Let’s not forget how News Ltd ‘supported’ rugby league by engineering a tectonic split via SuperLeague. What an absolute clusterf*^k that was, took years to recover from. News Ltd/Murdoch works for News Ltd/Murdoch and no-one else.

Hannes En Brianda Barnard

Good article and there should be no concerns with RA testing the market and controlling the bid process. Competition is good to extract the best value. However I don’t think the timing and the tenure of putting the broadcasting bid up for tender are optimal as there are so many negative factors ar play that could result in RA forced to except a low ball bid. This includes the poor performance of Australian Superugby franchises, the Wallabies men lowest ranking, lack of spectators and viewers etc.
Did RA drop the ball? It may be worth it to go short in a broadcasting deal or wait until conditions improve before you go to market.

Hannes En Brianda Barnard

Unless you do not believe your own BS and think things can actually get worst….

Who?

I don’t think RA (certainly not Castle) could’ve done anything better here. The market conditions in general are terrible (all broadcast content providers rapidly losing revenue and viewers), the code’s been in the toilet (though finally things are looking up, with much of the old guard gone)…
The option of taking a short term deal would be nice, but I don’t see market conditions improving in the short term. Until we know what the new ‘normal’ is for sports ‘broadcasting’, no one can accurately predict rights prices. As it stands, we’re kind of like renewable energy. Those who are more cashed up go and buy themselves solar panels, whilst average joes pay the utility provider. In this situation, the more cashed up codes go and run their own production and sell content direct – NFL Pass, NBA Pass, etc – whilst those without cash – Rugby – continue to source their broadcasting from the ‘utility’ companies.

Hannes En Brianda Barnard

Wouldn’t it be better in times of turbulence and change to have more flexibility that a shorter term deal would offer? It does not look like the broadcasters are standing in line to take the risk.

Dud Roodt

The non-disclosure is being sent to all potential parties this week – this is the official start of the tender process and we’ve already had a completely new partner (Optus) express loose interest. I would say that’s as good as could be hoped for now.

Who?

Flexibility’s a double edged sword. It may – may – mean they’re in a position to negotiate a better deal in 3 years’ time. But it may also be that, in three years’ time, the options are poorer, money’s even more scarce, and that’s just amongst broadcasters. Who knows – it could all turn bad on field and off field in the code (though I’m actually optimistic at present – something long term readers will know is a rare occurrence), and that could send the price through the floor, too. Plus, it doesn’t give the same budgetary planning stability. So whilst it may seem a good idea, it’s can easily – and, being Rugby, incredibly easily – bite us in the behind.

Hannes En Brianda Barnard

I would think as Australia is at an old time low, men ranked 7th and Superugby teams (excl Brumbies) off the pace that the management team will back themselves to improve the performance. It doesn’t seem to be the case however.

Who?

I hope we’re at an all time low…
But the rugby side’s only one side of the equation. Which is more than half the trouble. Rugby’s always been able to sell the dream, sell that ‘there’s always next year’, and sell the number of ex-pat Kiwis and Saffas we have. The bigger issue is the massive loss in advertising and subscription revenues faced by the broadcasters.

Dud Roodt

They have no choice? The deal is up next year. You can’t wait until the 11th hour to negotiate where you want the other party to budget millions of dollars of X years.

Hannes En Brianda Barnard

What prevented RA from negotiating a deal prior to the RWC or to decide to rather sign up for a 2 or 3 year deal instead of a five year deal?

Dud Roodt

There are more than 1 party involved in this?

You make the negotiation sound like something done in the garage of someone’s house.

It is a process followed by every other sport. Doing this negotiation 2 years out rather than a year out changes nothing about the negotiation, all it does is make the parties think they have more time to decide. You’re assuming Fox (or any other party) doesn’t have a constraint around when they can set their upcoming budgets. You’re also assuming there isn’t a clause in the contract indicating when negotiations on a new deal can take place.

As to taking a 2 or 3 year deal – if they had done that they would have been committing career suicide

Hannes En Brianda Barnard

I have been an Mergers and Acquisitions Manager in previous role, so have a good understanding of how to setup a sales process. Also in my current role I also manage competitive bids for large
projects. There is always tension between buyers and sellers about who control the process as whoever control the process will benefit by setting the timing, terms and conditions that will help you optimise your outcome – a Seller wants to make sure that they can generate sufficient competitive tension, because once the process starts you need to pull through as a mid-process change expose you to litigation risks. RA took control of this process when they decided to go to market, well done. However I do not think they picked the right tenure and have a risk that they may have to change course midway through the bidding process if they didn’t get the outcome they are after. It would be good to have an option for bidders to at least provide an option to bid for a shorter e.g. two year term on top of the 5 year term. With the speed streaming are developing and gaining widespread support it is important to keep your options open.

Dud Roodt

But what benefit to going into negotiations on a new deal would have been gained prior to the world cup? At that stage Australian rugby was at it’s lowest ebb (barring the Perth win), the Israel Folau thing was the only way rugby was getting in the press and viewership numbers were dismal.

Now at the very least we know from News Corps figures that their subscriptions (across both FS and Kayo) dipped considerably post-RWC – which I would say is a stronger position to be in that pre-World Cup where NC could have said that the sport hasn’t driven a subscription revival in decades.

AllyOz

It’s seems that the NRC is the potential loser in this with both sides looking to scoop up Shute Shield and some articles suggesting that NRC will be replaced with an Australian Club Championship of some description. There is a lot of speculation about who is in the right or wrong. Fox, from my point of view, had two choices (i) try and improved the viewership by improving the quality of their coverage or (ii) lower the price they paid for a product that is failing to get subscribers. What they can’t do, as a commercial operation, is to pay more for a product than it is worth in terms of the subscription incomes and advertising. So while others see this as Fox low balling RA as a negotiation tool I think it might be possible that this is just what we are worth at the moment.

We are the 7th ranked country in the world, we haven’t had any more than one of our Super Rugby sides perform at an above average level for the last few years and our two traditional provinces have both lost their first two games. Physical crowds are dropping and, while Shute Shield is undergoing some resurgence it still costs $300,000 to get one game per week on FTA. That is, it make minus 0.3 million in TV rights. Add to that the potential risk that whoever signs might lose SA to the 6 Nations by the end of the contract.

So is it really like someone said below, we’ve got a great product to sell?? I’m not anti-Raelene on this. I think she has made a bold move and is probably justified to give it a go but I am also not anti-Fox, they have to make a commercial decision on what the game can make for them, it’s not up to them to subsidise it unless they get something out of it.

As for 10 using it as the new BBL….they had the chance to take the FTA rights for soccer, a game that has a much bigger potential fan base (in terms of junior numbers and followers of the EPL) in this country than rugby and they didn’t.

Reading the SMH articles (which should be balanced if not slighty anti-News/Fox) about the negotiations over the weekend and they are a lot more balanced and nuanced than the article above and the commentary below.

I hope Raelene can pull it off and we do get more money to support the growth of the game but I think Fox are just making a logical and reasonable decision about what they can afford to pay for a game that unfortunately is in the decline in this country.

Huw Tindall

I believe all live sports are loss leaders for networks (pay and FTA). The idea is get them in and they stay to watch some baking or home renovation show etc. Hard to say exactly what the broadcast rights are worth but a top to bottom content offering for all things rugby is a great start. Like you though I fear for the NRC. Such great rugby it deserves more money behind or it should be ring fenced as a pure pathways comp and not be required to generate massive numbers. It’s already proving too valuable in terms of player development to chuck away.

AllyOz

You’re probably right Huw… but I wonder if that is the biggest thing that has changed. The younger audience and even myself at 52 doesn’t watch TV in that way anymore. I don’t stay and watch MKR because I had to sit through 52,732 ads for it over the BBL summer, I watch re-runs of dads army on youtube and binge Game of Thrones and Vera ad free. Or if I was a naughty boy I would use a VPN and stream stuff from overseas. So maybe the whole loss leader thing doesn’t apply anymore and that is the reality that Fox has to face. While some in the Murdoch press have been pretty partisan, without doubt, others like Wayne Smith have been pretty balanced and there is very little difference between his reporting of it and an article I read from Georgina Robinson. The partnership between RA and Fox over the years has probably delivered reasonably well for both up to a point but the last 5 years have been tough and haven’t delivered for fans and probably for the broadcaster. Without Fox’s early involvement some of Australia’s top players would have gone to a Packer backed world league and the ARU/RA could quite possibly have ceased to be…Fox’s initial actions set up and financed our move to full professionalism and Super Rugby was THE leading rugby comp for many years.

The expansion, while I love the prospects that it tried to bring, I feel was premature for us. In retrospect, if we had kept at the 3 original teams and used the funds that were ploughed into the two new franchises over the years into an NRC type structure underneath to develop the WA and Vic markets and player bases then we might have got a better outcome. I genuinely feel we only have the player base to support 3 teams that can be competitive with the 5 Kiwi teams. If we were to enter some sort of trans-Tasman comp then we would either have to drop back to 3 or they would have to increase to 7 or 8 for the comp to be balanced and competitive (or there would have to be some sort of draft that allowed transfer of all players across all teams regardless of their country of origin – which I personally wouldn’t like).

In terms of the negotiations and the tender process its very interesting to watch. Raelene Castle hasn’t chosen the time but the product at the moment is a bit tarnished. If she was gifted the situation and timing of Pulver 5 years ago then perhaps things would be different. We had a Super Rugby Champion side in 2014 and were World Cup Finalists in 2015 and the TV/Media world was different. Her timing (not of her choosing) seems less supportive now. The game has come through 3 – 4 of its most challenging years and the numbers aren’t great from a financial or viewer perspective. Her job will probably depend on the success or failure of this and that is probably not fair as she hasn’t chosen the timing or the battlefield. She does have Shane Mattiske from the NRL who pulled off their last deal and snookered Fox (that could be a positive or a negative) but if Fox are genuinely looking to cut their cloth to fit the new paradigm then it may not matter. Unfortunately Union doesn’t have the pulling power of League here. It certainly is fascinating to watch though.

Huw Tindall

Considered response mate!

Times are changing and even my mum streams more on Netflix and YouTube for what she likes than watches on traditional TV. What’s this means for the long term broadcasting market is anyone’s guess.

Agree Fox was a great partner to start with but got many reasons the relationship is failing to deliver and not all of Fox’s making.

I don’t claim to have the answers but Saffa in the current sub-Test level comp isn’t working from a fan engagement perspective. Still a big draw for The Rugby Championship but as the main top flight comp to build the game it’s a no. If we could keep Saffa in TRC but move to a Pacific based comp to replace Super whilst maintaining financial viability would be the dream.

Hannes En Brianda Barnard

We have 53% more registered players than New Zealand. We have the players to support more than 5 franchises but are not producing the quality. The problem is the poor standard of local competitions outside Shute Shield and the hospital cup.

AllyOz

Do we measure registered players in the same way as NZ does? In any case, i think its very difficult to argue that we have enough players of the standard of NZ Super Rugby players, so whether we have more players at level doesn’t really change my point. We don’t have enough players of that standard to match the standard of the NZ teams, so we either need to spread their quality over more teams or consolidate ours. And also we need to look at where they need to be based and you could mount a very strong argument that if we can only have 3 that we need them in NSW, Qld and WA if that is where the next biggest junior availability is but as you suggest they also need to have strong regular competition.

Xaviera

How wonderful to have a multi-platform forum for your output! Convergence between 9 & GAGR anyone?

Meanwhile, to the meat & potatoes. As I wrote recently, the true rugby crowd is not only realising, but standing up to the Fox/News blitzkreig, as it should. Still plenty of nupties who have drunk the F/N Kool-Aid though, but even they seem to be quietening down a little. Finally.

Testing the market is critical, and those shouting about the secrecy of it all should know better – this is commercial in confidence negotiations, so of course it’s going to be managed in a certain way. I would also like to think those invited to submit proposals would include a few left field players not yet discussed (e.g. Amazon/Netflix/Facebook/Google/Apple etc). We’ve seen such jump shifts in sports rights before – UK soccer anyone? If nothing else, it will create some competitive tension, which will only help.

Ten, now backed by CBS and with a rugby loving, Highlander/All Black supporting Kiwi CEO at the helm, will give it a good nudge. If they win it, they will add their touch to it. If they don’t, then hopefully that is because someone has offered a higher price &/or a better coverage. Let’s not discount Fairfax/9, and perhaps even someone from rugby heartland with a backer with deep pockets.

It really could get very interesting, complexity notwithstanding. Watching with interest to see how it plays out.

Reds Revival

It is unlikely that 9 will bid for it. They paid a record price for the NRL on the back of slowly declining audiences. Combine this with their poor results from the Rugby World Cup several years ago, and it doesn’t make a strong story for them.

Xaviera

Unlikely, but possible. They may choose to bid strategically, to drive up the price for others, or they may offer an opoortunistic low-ball bid. Someone may hop into bed with Foxtel and do a combined bid. Lots of potential scenarios, which is why taking it to market makes sense – you just never know who is out there, and what they want. 9, with their increased presence of die-hard rugby people via Fairfax (and others who shall remain nameless), may think if they control broadcasting of both NRL and rugby that they can make the two co-exist.

Avid

Agree – good story X – there is enormous scope for left-field creative, yet opportunistic pitches.
Same today applies to O’Niell’s old pitch to Fox based on the under-values and low-cost entry to an untapped and global market. But Fox effectively sandbagged rugby. Great, now they come out at fever pitch crying wolf.
Chanel 10 owner CBS is now the elephant in the room with its sponsorship of US’ Major League Rugby https://www.majorleague.rugby/ adding intrigue with the US market in play. There are loads of side stories around this intrigue – no less the greater player drain.

Xaviera

Worth noting too that Amazon IS on the list. Whether they bid or not is another issue, but their mere presence can only be beneficial.

Avid

I just reckon CBS is already well in play with RA and Fox have been flat footed and outfoxed themselves. Just needs reconnecting with local community for some true tribalism.

Xaviera

I’d agree with that. And given its gene pool, when Fox doesn’t get what it wants, it plays dirty, as we’ve already seen. A three way ptich would, should, generate an excellent outcome, especially if the sport is packaged from top to bottom with a FTA component.

Avid

FTA is paramount, ideally + newspapers.

AllyOz

In the existing arrangement, as I understand it, Fox Sports bought the rights and then Channel 10 negotiated with Fox to buy the FTA telecasts of the tests. So Channel 10’s money didn’t go to the ARU but to Fox and Fox paid the ARU what they negotiated directly with them. Of course, or other parties, could look to line up someone in advance before they go into the deal but much will depend on what’s on offer and the FTA component. RA wants additional flexibility and generally in my limited experience of contract negotiation that means the other party expects you to give up something in exchange.

at the time of the previous negotiation SMH printed this

“Pulver said the revenue growth represents a rise from $23m a year to $57m a year.”

Now we are hearing figures that some are prepared to pay $30-40 m and, to me, that sounds about right.

So Fox Sports more than double the amount that it paid for the game over the last five years. Now consider the performance of the Wallabies and the Super Rugby teams over the last 5 years, the axing of 1 of those teams reducing the games show in Australia by 1 per round, the removal of a coach and his replacement with another. They participated in none of the “green shoots” of club rugby (until they helped bank roll the broadcast costs). The infighting between the coach and the administration in the lead up and during our worst performance in our involvement in the World Cup, declining subscriptions, declining crowds at the ground, the regular exodus of some of the top players overseas to play in other competitions, the inability of our sides to perform strongly against the opposition. A competition that’s structure can be changed at a whim.

Did Fox get value for money from doubling the revenues paid to the ARU/RA?

If I was Rupert I would be telling them to sharpen their pencils too to be honest.

I hope Optus or Rugby Pass or ESPN or someone pays us a bucket load of cash to keep the game going but they, like Fox, are going to need to know that they can make their money back on it, either directly or indirectly.

As for Channel Nine, the only interest they would have in rugby union would be to buy it so they can ensure that it is scheduled at a time that doesn’t compete with their NRL or Tennis coverage. The last time they had the rights to overseas tests a couple of years ago they put Ray Hadley on as a commentator. I had to sit through that and it was one of the least pleasant games I have ever had to endure. I admire your optimism but I am afraid it might be misplaced.

Mike

A major issue with viewership is the lack of a true lead in. What we have now is stilted and boring! The amazing thing about Rugby is the grass roots, GPS, Subbies (and major metro comps), Shute. Truely tribal clubs with players, fans, and often hundreds of years of history. A start (no matter what network) would be a live 1 hour long show from 2-3 pm that tours around to the game of the week. Showcasing the passionate club atmosphere. All they do is goof around, talk rugby, hype the crowd up. They do this in the US for college football and it works! Showing fun and atmosphere will naturally push attendance and viewership up.

skip

In a sense the whole American football broadcast works like this. Friday TV is high school games, Saturday college, Sunday the NFL, each a step up. It’s so successful people will live without professional football for a 7 month off season and have shunned any rival league that ever tried to fill that gap.

skip

I like this site for these types of articles. I wrote one about why I think super rugby’s conference hasn’t worked with the premise that looking at what others with similar issues do would’ve been a good thing. Your point that RA ought to be looking at how FTA attempted with other sports is interesting and I think the vitriol coming out of Fox about RA’s approach suggests a degree of concern they probably don’t intend to express. Paying attention to the legal aspects ASIC pose is also an interesting point. I’ve not seen much in the commercial media on any of this.

Who?

I think I saw one article mentioning ASIC and Mitchell with Tennis rights – but let’s be fair, most media (given most media about Rugby that we see is from News) aren’t going to praise Raelene for good governance…
But it’s great to see Matt bring it to the fore on this august outlet.

skip

I didn’t notice it was written by the supreme overlord. I would have sucked up more..

Who?

What, like mentioned that it’s far more likely to get noticed by the wider Rugby community by being published here than wherever the other article I saw might’ve been..? The other article might’ve been Wayne Smith.
Because it’s true. Rugby fans come here, the other source was somewhere general sports fans occasionally browse.
Is that enough brown nosing..? :-P I don’t care – it’s accurate.

KwAussie Rugby Lover

Well written Matt. It’s certainly an interesting time and I think you’re bang on about this being more about the decline of Foxtel. They remind me of the way taxis complained of Uber but never changed their model and just list out as Uber provided a service the customers wanted. Unfortunately for Foxtel the customers want a different product and they need to adapt or lose out. I see all this as scare tactics by them more than anything substantive but it will certainly be interesting to see how it pans out

Huw Tindall

Last paragraph is the arguably the biggest hat tip to Caste. She got NSWRU, SRU, and QRU all to agree to cooperate on TV rights!!! Next up for her is sorting out the Israel/Palestine conflict.

Hannes En Brianda Barnard

I wonder it that came at the cost of the NRC? I noted that she didn’t include the NRC in the broadcasting bundle (very strange) and there were rumours that RA will ditch the NRC at the end of 2019. Axing the NRC when Superugby is dying will be a huge step backwards.

Huw Tindall

Very good point mate. I didn’t pick up on that little omission. NRC starts after shute shield/hospital cup so not a complete conflict there? I’m an NRC fan even though I don’t get to watch too many games. Outside NSW it’s been a big success in pathways and could have been in NSW is they got their sh!t together.

RugbyReg

yeah unfortunately I think the NRC is dead in the water.

Huw Tindall

I’d like to know what they propose to replace it with. An Aus Club Comp sounds nice but how would you distribute all the Super players who aren’t in the Wallaby squad but who would otherwise be in NRC? What if their club isn’t in the Comp? Tough they get 7 less games of high quality rugby? Also, what about the club players who would have been in NRC but their club doesn’t make this hypothetical replacement comp. Pathways wise it just seem to make sense and that’s what I’m concerned with.

RugbyReg

yeah, they are all my questions about it too. You know me, I’m NRC through and through. Never got a national club comp’s merit other that content. It’s certainly not player development.

Dud Roodt

While I think the NRC is a massive step in the right direction, and is a laudable approach to bridging the gap between club and SR, I feel that it is a luxury afforded to countries with strong unions and deep pockets.
The NPC (or whatever it’s called these days) draws similar crowds to the NRC (ie fuck all) but is a great system for developing talent. And the Kiwis can keep it running because they’re so financially secure.
I’m not sure we have the luxury.
I don’t know what the answer is, but the crowds aren’t being drawn to the NRC and in this country our sport already survives on the smell of a oily wet rag so it has to be attractive to broadcasters.

Hannes En Brianda Barnard

I guess NSW got what they wanted…bad news for every else….

Dud Roodt

Fuck, what’s he said about Palestine now? At least that’s rugby league’s issue and not ours

Huw Tindall

Lolz very good

Who?

Rubbish – Palestine’s still playing Hooker for the Brums! But I didn’t know he and Izzy had beef..?
Remember – Palestine = the Folau who’s not Israel, in Hoss’ nomenclature. :-D

Wallabrumby

Would be fantastic to see someone like TEN take it over and get all games on their FTA offerings, it would do wonders for grassroots and general rugby supporter base growth.
I particularly like the comparison to the Big Bash and what TEN managed to do to that and would love to see them do something similar with Rugby.
Everyone is noting how super rugby started this year with more of a whimper than a bang and that is largely in part because the advertising around the broadcaster not selling its content hard enough. Time for a change or at least a wake up for FOX sports.
I also like the comparison between chess and checkers (notice also the similarity to the name checkers and he who shall not be named as a former coach?, coincidence i think not) and that squidge rugby review is gold and exactly what is needed to educate on the finer points of the game, which no other sport really offers.

formerflanker

“Going to the market” is not accurate. RA has split a large player out of the market so we are actually “going to the rest of the market.”
I thought leaving Fox in the mix during negotiations with various other market players would have pushed up all possible benefits, from $ to promoting the code.

RugbyReg

they haven’t split from Fox. Fox have stepped away. Just like they did to cricket before announcing a huge broadcast deal some weeks later.

Cornchips

While they are at it SANZAR/broadcasters need to chill out on their IP claims on social media. They are only harming their brand by not allowing others to use footage, it prevents people from promoting the sport

Who?

Thanks Gagger – great to see the boss step in to bring some balance and clarity around this situation.
Must say – not the first balanced, “Let’s give Raelene a go” article on here since the RWC, which flows against the opinion of the vast majority who were ready to discard her with Cheika and Clyne (people who’ve demonstrated their competencies, whereas Castle’s not had that opportunity to date). It’s refreshing to see G&GR maintaining the traditional approach of giving people a fair go, and the rare quality of having patience and reporting on the full story, not just what might suit an agenda.

Bay35Pablo

On. The. Money.
No pun intended.
Exactly my thoughts too. Am sick of the boofhead rugby “fans” who whinge about everything, but know nothing (emulating their heroes Marto & Kearnsie). For a supposedly “sophisticated” and more discerning bunch of sports fans, we don’t show it sometimes. Not that ARU/RA have done much to inspire confidence over the decades, but Pulver and Castle haven’t done anywhere close to as bad a job as suggested. As I always say they could get Jesus to stage the Second Coming and play 9 for the Wobblies, and we’d still have whingers that (a) he’s playing for NSW in Super Rugby, (b) his hair’s too long, and (c) they aren’t doing enough for grassroots despite JC doing junior days every day where he hands out loaves and fishes.